(Australian Financial Review, Washington, 8 March 2024) The Pentagon held discussions with Resources Minister Madeleine King about how it could co-invest in an Australian nickel project alongside the Australian government to help mitigate the impact of a glut undermining future critical minerals self-reliance. Ms King met with the under-secretary of defence for acquisition and sustainment, Bill La Plante, at the Pentagon on Thursday (Friday AEDT) to discuss options available following a collapse in the nickel price that has led to the closure and write-down of Australian projects. “The options around collaboration of government financing agencies with those out of America might be EXIM, or under the Defence Production Act,” she said. The Export-Import Bank is the export credit arm of the US federal government.
Australia
Arafura Rare Earths offered EDC and Euler Hermes support
(AUManufacturing, No Address Provided, 31 July 2023) Arafura Rare Earths pushed ahead with engineering work and construction of its giant Nolans rare earths project in the Northern Territory in the latest quarter despite a softening market for the critical metals. Arafura has received a letter of interest from Canadian export agency Export Development Canada for the provision of up to US$300 million in debt financing. Nolans has support from the Northern Australia Infrastructure Facility of $150 million and in principle support for a loan guarantee of up to US$600 million from German export credit agency Euler Hermes.
Australian Government sued for failing to report the climate and biodiversity impacts of subsidising fossil fuel projects
(Jubilee Australia, NSW, 18 July 2023) Jubilee Australia, a human rights and environmental organisation, has filed legal proceedings this morning (18th July) in the Federal Court of Australia against federal government agencies that subsidise new fossil fuel projects but don’t disclose the full environmental impacts of those activities. The claim is against Export Finance Australia (EFA) which is Australia’s export credit agency, and the Northern Australia Infrastructure Facility (NAIF), a $7bn fund for infrastructure in northern Australia. Both provide taxpayer-subsidised finance for risky new fossil fuel and related projects that would otherwise not go ahead. “There are very real fears that without clearer climate commitments, EFA and NAIF could fund infrastructure in Darwin designed to support a massive expansion of fossil gas – such as Middle Arm, or to subsidise some of the world’s largest fossil fuel companies such as TotalEnergies and ExxonMobil’s Papua LNG project in Papua New Guinea, similar to what EFA has previously done,” Luke Fletcher Director of Jubilee Australia said.
Australian roundtable notes ECA support crucial to transition
(Infrastructue Investor, Sydney, 19 May 2023) Australia’s infrastructure sector has centred on privatisations for decades. But a rapidly changing world calls for more greenfield development. Australia’s transition prospects have recently been boosted by the country’s most significant emissions reduction legislation in more than a decade. Total emissions from major industrial facilities must now be cut and not just offset. This is deemed critical to meeting Australia’s net-zero pledge, which will require a 45% reduction in emissions by 2030. Danny Latham, head of Australia and New Zealand at Igneo Infrastructure Partners notes: “We need something like $400 billion of investment in renewable generation and associated transmission links to get anywhere near 2050 net-zero targets”. Aaron Ross of rhw ANZ Banking Group notes that one way the Australian government could better support technologies associated with the transition is through export credit. “The Danish and Korean export credit agencies EKF, KEXIM and K-Sure have been providing significant support to help develop wind and battery manufacturing projects, for example,” he says. “We have seen similar things in Taiwan, Southeast Asia and Europe generally. There are opportunities for Australia too, in terms of accessing the Export Credit Agency market as an additional source of capital to fund the transition.”
Tiwi Islanders protest Santos’ Barossa gas project in Australia
(Upstream, Perth, 29 May 2023) Australian oil giant Santos denied claims of human rights abuses against Indigenous Australians relating to domestic gas and LNG projects planned or under development that have been alleged to some of the company’s investors and financiers. Equity Generation Lawyers, which bills itself as specialists in Australian climate change law, early last month filed human rights grievances against financial institutions supporting the Barossa gas project located in waters off northern Australia. Those financial institutions included Australia’s ANZ and Westpac, DNB Bank of Norway, Singapore’s DBS Bank and three Japanese banks. In tandem, export credit agencies in Japan and South Korea that are set to provide financial support to Santos’ project partners from those nations also received letters of complaint. The company has more than 90 agreements in place across Australia that relate to native title, Aboriginal land rights and cultural heritage management, involving six Aboriginal Land Councils and 23 Traditional Owner groups.
Quad summit discusses ECA cooperation In Indo Pacific
(Deccan Herald, Bangalore, 21 May 2023) The leaders of the US, Japan, Australia and India met for the Quad Summit on the sideline of the G7 conclave in Hiroshima and agreed to work on a Memorandum of Cooperation (MOC) between the export credit agencies of the governments to strengthen collaboration for the promotion of trade, financing of trade-enabling projects, economic development, and knowledge-sharing with respect to the export of goods and services. The MOC underscores the importance of economic development of the Indo-Pacific region and of increasing business opportunities, they said. “We emphasise the importance of adherence to international law, particularly as reflected in the UN Convention on the Law of the Sea, and the maintenance of freedom of navigation… including those in the East and South China Seas,” the leaders stated in a joint statement, tacitly hitting out at China. India on Saturday joined Japan, Australia and the US to denounce China’s “destabilising and unilateral actions” to change the status quo in the Indo-Pacific region and its move to militarise the disputed features in the East and the South China sea.
Export Finance Australia (EFA) can no longer justify fossil fuel funding
(Lowy Institute, Sydney, 6 April 2023) Since 2009 EFA has helped to underwrite global heating by providing roughly AU$1.69 billion to fossil fuel firms, while offering a relatively paltry AU$20 million for renewable energy projects. Last year, many of Australia’s key allies signed the so-called Glasgow Statement, which commits signatories to ending public support for international fossil fuel projects. The reasoning was clear: continuing to use taxpayer dollars to underwrite new oil, gas and coal projects, such as coal-fired power plants, is inconsistent with the 1.5°C warming limit and goals of the Paris Agreement. Our ECA research suggests this pattern of lending is likely a result of interrelated pressures from large, politically influential exporting firms that argue EFA’s support is critical for the Australian economy, and national security concerns about the future of Australia’s energy security. However, these arguments no longer stack up. First, fossil fuel firms that benefit from billions in EFA support are among Australia’s largest and most profitable corporations; second, ending public financial support for the export of coal and gas will not prevent the sector from maintaining energy security necessary to power the country’s economy and third, and related, if Australia is to be a renewable energy superpower as the PM has declared, Canberra can ill afford to delay supporting renewables industries.
Blocking a Carbon Bomb: Tiwi Islanders prevent $4.7 billion Barossa offshore gas project in Australia
(Oil Change International, Washington, 14 December 2022) In a landmark decision in September, the Federal Court of Australia ruled that Santos Ltd, one of the world’s top 20 largest oil and gas companies, would not be allowed to drill in the Barossa gas fields off the coast of northern Australia. The Court ruled that Santos had failed to consult Tiwi Traditional Owners. Santos appealed the decision, but this was in vain. Two weeks ago, the appeal was rejected, further solidifying legal victory for the Tiwi Islander Plaintiffs. The Barossa project alone included over $1 billion USD in public finance support from the Japanese and Korean governments’ export credit agencies (ECAs), Japan Bank for International Cooperation (JBIC), Export-Import Bank of Korea (KEXIM) and Korea Trade Insurance Corporation (K-Sure). Santos and the Australian Government assured these ECAs that the project approvals were solid, even after Tiwi Island people had warned them about lack of free, prior and informed consent, and despite the fact that extraction from these wells would be completely at odds with Australia’s climate obligations.
Australia in talks to help PNG buy $1.1 bln PNG LNG stake
(Reuters, Sydney. 6 December 2022) Papua New Guinea’s state-owned Kumul Petroleum is in talks with Australia’s export credit agency to help fund a $1.1-billion acquisition of a 5% stake in the PNG LNG project from Santos Ltd (STO.AX). Santos announced in September that Kumul had made a binding offer to buy a 5% stake in PNG LNG from the company for $1.1 billion, subject to the other joint venture partners, which include ExxonMobil Corp and Japan’s JX Holdings Inc, waiving their pre-emptive rights to match the offer.
Gas is a false route to Australian energy security
(Yahoo News, Sydney, 1 November 2022) Australia is being urged to change course and end taxpayer-funded investment in fossil fuel projects. Ahead of climate talks in Cairo, campaigners are calling for the Albanese government to join a group of countries that last year pledged to end international public financing of coal, oil and gas development. Australia is one of the largest recipients of international public investment in fossil fuels, according to a report by Oil Change International and Friends of the Earth US. Public finance from Australia’s export credit agency was also heavily in favour of fossil fuels, the report found. Australia is also building what could be the world’s dirtiest offshore LNG project, the Barossa project, with the help of overseas public finance from South Korea and Japan
